To the Members
The Directors have pleasure in presenting before you the 33rd Annual Report of theCompany together with the Audited Financial Statements for the year ended 31st March 2022.
Financial Summary of the Company (Rs in Lakhs)
|Sl. No. Particulars ||2021 - 2022 ||2020 - 2021 |
|(i) Total Turnover ||38606.85 ||23071.62 |
|(ii) Profit / (Loss) before Interest and Depreciation and exceptional item ||5432.85 ||3787.23 |
|(iii) Interest ||61.62 ||88.91 |
|(iv) Depreciation ||553.68 ||550.67 |
|(v) Exceptional item ||210.55 ||- |
|(vi) Profit / (Loss) Before Tax ||4607.00 ||3147.65 |
|(vii) Tax Adjustments including Deferred Tax ||1318.49 ||893.29 |
|(viii) Profit / (Loss) after Tax ||3288.51 ||2254.36 |
|(ix) Other comprehensive income ||(18.56) ||36.78 |
|(x) Total comprehensive income ||3269.95 ||2291.14 |
|(xi) Profit brought forward from previous year ||6393.55 ||4102.41 |
The Company's Profit before Tax for the year ended 31st March 2022 has increased by Rs1459.35 lakhs to Rs 4607.00 lakhs as compared to Rs 3147.65 lakhs in the previous year.The total revenue from operations for the year ended 31st March 2022 is Rs 38152.54 lakhsas against Rs 22683.71 lakhs in the previous year. The increase in revenue is due toincrease in Poly Iso Butylene (PIB) sales volume from 24918.95 metric tonne to 29302.17metric tonne and mainly attributable due to increase in sale prices resulting from a risein the price of raw material inputs.
Status of the Plant
The plant production capacity is 36000 MT per year and necessary statutory approvalsare received. The plant is ready to produce at full capacity and we are seeing robustdemand both in the domestic and export market.
The supplies from the adjacent refinery have improved both in terms of quality andquantity in FY 2021-22 compared to previous year. Continuous usage of high pure rawmaterial helped the Company to achieve greater operating efficiencies along with energysaving water saving initiatives has resulted in a better contribution to the bottom line.Currently your Company has a captive power plant that uses Paddy husk as fuel and so farthe availability of fuel is ensured through proper supply agreement with few suppliers.However in long run we anticipate a push by the Pollution Board authorities to use cleanfuels such as LNG to operate the Boilers. Taking this into consideration your Company isworking on the viability of converting the existing Boiler to handle clean fuels andevaluating other fuel alternatives.
The 247 kw solar plant continues to generate power which is consumed by the main plantalong with captive power plant generation. Some more solar panels are being planned to beinstalled on the available roofs in the plant area to get more renewable energy in orderto reduce our cost of power & environmental impact.
Water supply from Metro water Board from their TTRO plant supported to handle theeffluent more effectively and thus the discharge of effluent has been significantlyreduced. Your Company is mindful of our impact to the environment and consistently lookingat ways and means to reduce our liquid effluent discharge.
Your Company continues to retain ISO certification - 9001:2015 for Quality Managementsystem and 14001:2015 for Environmental Management system.
All statutory requirements with regard to Petroleum and Explosives Safety Organisation(PESO) and the Directorate of Industrial Safety and Health (DISH) are met on time. Allpreventive and predictive maintenance are being followed systematically to keep theoverall plant remaining in good condition.
For the 10th consecutive year in succession your Company has achieved 11673 days"Accident Free" operation. The Company has been continuously imparting trainingto all its employees to ensure that all projects execution apart from the plant operationis "Accident Free" and efficient.
Your Company achieved a record production of 30789 MT in comparison to the previousyear production of 25001 MT which translates to 100% capacity utilization in terms oflicensed capacity.
Efforts were taken and successfully started using the waste heat available in the steamcondensate in the process. A significant fuel saving has been established in the CPPboiler after started using the waste heat energy from the steam condensate.
Your Company was awarded twice by CII one is "Excellence In EnergyManagement" Award and the other is a Special category Award for "Best EnergyPractices" for the efforts taken to conserve Energy in financial year 2021-22.National Safety Council Tamil Nadu Chapter also recognized your Company by awarding aStar Award "Occupational Health Safety and Environment Awards 2020".
The efforts taken in the last financial year to develop new applications are showingencouraging results and our new product has been positioned in the market to win themindsets of the customers and further trials are being taking place at various newcustomers. As a continuing process efforts are taken to make solid Polymers (K Vis-20)which is the preferential product over the liquid form and trials are underway withvarious customers.
Efforts are put forth to find value addition for the co-products of Polymer and trialsare underway with customers to get their feedback.
The first phase of Reactor operation in Auto mode using APC philosophy has shownencouraging results and further improvements are being taken up. Catalyst preparationwhich is so far more hazardous to handle manually is now completely automated.
General Safety Audit has been conducted during Jan 2021. Some few action items whichneeded long shutdown of the plant are now being attended and all the other suggestions /recommendation given by the auditing team are completed. To bolster our Safety practiceswe have received ISO 45001:2018 certification in the financial year 2021-22 forOccupational Health and Safety Management System.
Pollution and Environment compliances
The Central Pollution Control Board (PCB) has introduced "Online" monitoringand checking for the Air and Effluent parameters. Your Company has created all necessaryfacilities as per Pollution Control Board's direction and submitted the records confirmingthe statutory requirements with respect to pollution norms. PCB has advised all the unitsto retrofit the DG sets to control the PM emission by 75% from the existing level. YourCompany also made investments on Retrofitting to meet the PCB norms.
Research and Development
The Company's R&D's Section has been recognised bythe Department of Scientific& Industries Research (DSIR)
Recognition and the recognition has been renewed for next 3 years (till 2025).
Around Rs 44 Lakhs have been spent for R & D in the Financial Year 2021-22 forvarious research activities and infrastructures to improve Value Addition for theCo-products and for new applications.
Conservation of Energy / Technology Absorption / Foreign Exchange Earning and Outgo:
(a) Conservation of Energy :
Your Company implemented the following Energy Saving Practices which gave substantialcost saving to your Company.
(i) Waste Heat recovery from HP condensate drum vent using PHE.
(ii) Closed loop drain and OFF gas recovery system implementation.
(iii) E-109 waste heat recovery using Hot condensate.
(iv) Converting Slop into Desired Product.
(v) V-108 & 208 LT Provision and P-109 & 209 Auto operation.
(b) Technology absorption:
Rs 56.09 Lakhs was spent in Financial Year 2021-22 mainly in the areas like Waste heatrecovery Off gas recovery Ultrasound Leak detector Thermal scanner and LT based pumpoperation to save electricity.
(c) Foreign exchange earnings and Outgo:
(Rs in Lakhs)
|Sl" Particulars No. ||2021-22 ||2020-21 |
|n Total Foreign Exchange (' earned ||5827.83 ||6983.71 |
|ii. Total Foreign Exchange (ii) outflow ||270.78 ||82.07 |
The Board of Directors met on 25th May 2022 to take account of the full yearperformance various growth opportunities and the ongoing expansion project. Afterreviewing this the Board of Directors has decided not to recommend any dividend for theyear 2021- 2022 considering the ongoing expansion project and to conserve resources.
During the year 04 Board Meetings and 04 Audit Committee Meetings were held thedetails of which are given in the Corporate Governance Report. The intervening gap betweentwo meetings was within the period as prescribed under the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and MCA Circularsthereon.
The paid-up equity share capital as on March 31 2022 was Rs 5884.64 Lakhs. TheCompany has not issued any shares with differential voting rights nor granted stockoptions or sweat equity.
Directors and Key Managerial Personnel
Mrs. Nina B Kothari (DIN: 00020119) Director is liable to retire by rotation at theensuing Annual General Meeting and being eligible offers herself for re-appointment.
Mr. S. Sundarraman (DIN: 01032768) was appointed as an Independent Director w.e.f.22.11.2017 for a term of five years and based on the evaluation of his performance and therecommendation of the Nomination and Remuneration Committee the Board proposes toreappoint him for a second term of 5 years as an Independent Director w.e.f. 22.11.2022subject to approval of shareholders in this Annual General Meeting by passing a SpecialResolution in accordance with Section 149 (10) read with Schedule IV of the Act.
Ms. Deepa Bansal Company Secretary of the Company resigned with effect from April 102021 and Mrs. K. Priya was appointed as the Company Secretary and Compliance Officer ofthe Company with effect from April 11 2021.
Mr. Arjun B. Kothari Managing Director Mr. M. Rajavel Whole Time Director Mr. S.Sivamahesh Chief Financial Officer and Mrs. K. Priya Company Secretary are the KeyManagerial Personnel of the Company as per section 203 of the Companies Act 2013.
Declaration from Independent Directors
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 and Regulation 16 of the SEBI(LODR) Regulations 2015 that the Independent Directors of the Company meet the criteriaof their Independence laid down in Section 149(6) including the confirmations that theirnames have been included in the Data Bank maintained by the Indian Institute of CorporateAffairs and Mr. S. Sundarraman has cleared the online proficiency self-assessment test andall other Independent Directors were exempted from undergoing this test for theIndependent Directors pursuant to Rule 6(4) of Companies (Appointment and Qualification ofDirectors) Rules 2014. During the year under review the Independent Directors met onMarch 10 2022 without the presence of Non - Independent Directors and members of the Management.
Composition of Audit Committee
The details of composition of Audit Committee is provided in Corporate GovernanceReport of this Annual Report. The Board has not rejected any proposal / recommendations ofAudit Committee during the year.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andSenior Management and their remuneration. The salient features of the Remuneration Policydetails are stated in the Corporate Governance Report. The Remuneration Policy approved bythe Board of Directors is posted on the website of the Companywww.kotharipetrochemicals.com
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism named "Whistle Blower Policy" to deal withgenuine concerns raised by the Directors / Employees if any. The details of the VigilMechanism / Whistle Blower Policy is explained in the Corporate Governance Report and alsoposted on the Company's website www.kotharipetrochemicals.com
Particulars of Loans Guarantees or Investments
The Company has not given any Loans or Guarantees covered under the provisions ofsection 186 of the Companies Act 2013. The details of investments made by the company aregiven in the notes to the financial statements.
Related Party Transactions
All related party transactions entered into during the financial year were on an arm'slength basis and were in the ordinary course of business and there were no 'material'contracts or arrangement or transactions not at arm's length basis and thus disclosure inform AOC-2 is not required.
All Related Party Transactions are placed before the Audit Committee and the Board forapproval. Prior omnibus approval of the Audit Committee is obtained for the transactionswhich are foreseen and repetitive in nature. For all the transactions entered pursuant tothe omnibus approval so granted a statement giving details of all such transactions isplaced before the Audit Committee for their approvals on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is posted on theCompany's website www.kotharipetrochemicals.com
Prevention of Insider Trading
The Company has adopted a Code of Prevention of Insider Trading with a view to regulatetrading in securities by the Promoters Directors and Designated Persons of the Company.The Code requires pre-clearance for dealing in the Company's shares and prohibits thepurchase or sale of Company shares by the Promoters Directors and the designated personswhile in possession of unpublished price sensitive information in relation to the Companyand during the period when the Trading Window is closed.
Directors' Responsibility Statement
In terms of Section 134(5) of the Companies Act 2013
the Directors would like to state that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
As required under Section 92(3) copy of Annual Return
is placed on the Company's website.
The web link to access the annual return is
a) Statutory Auditor
The Statutory Auditors of the Company M/s. P Chandrasekar LLP Chartered Accountants(Registration No.: 000580S/S200066) hold office till the conclusion of the 33rd AnnualGeneral Meeting of the Company.
At the ensuing AGM the first term of five years of M/s. P Chandrasekar LLP CharteredAccountants shall expire and they are eligible for re-appointment for another term of 5years under the provision of the Companies Act 2013. The Company has received theirwritten consent pursuant to section 139 of the Companies Act 2013 and a certificate thatthey satisfy the criteria provided under section 141 of the Companies Act 2013 and theRules frame there under confirming their eligibility for re-appointment as Auditors ofthe Company. As required under SEBI
(Listing Obligations and Disclosure Requirements) Regulations 2015 the Auditors haveconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
Your Directors have therefore proposed to appoint M/s. P Chandrasekar LLP CharteredAccountants as Statutory Auditors of the Company subject to the approval of theshareholders at the ensuing AGM. There are no qualifications or observations or anyadverse remarks made by the Auditors in their Report on the Financial Statements for theyear 2021-22.
b) Cost Auditor
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the Cost Audit Records maintained by the Companyin respect of its Poly Iso Butylene (PIB) unit require to be audited. Your Directors onthe recommendation of the Audit Committee appointed M/s. P RajuIyer M. Pandurangan &Associates Cost Accountants in practice for conducting the audit of cost records of theCompany and the remuneration payable to the Cost Auditor is required to be placed beforethe Members in a general meeting for their ratification. Accordingly a Resolution seekingMember's ratification for the remuneration payable to M/s. P. RajuIyer M. Pandurangan& Associates Cost Accountant is included at Item No. 4 of the Notice convening thisAnnual General Meeting.
c) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mrs. V. Vasumathy V. Vasumathy & Associates Company Secretary in PracticeChennai as Secretarial Auditor of the Company. The Secretarial Audit Report is formingpart of this Annual Report and does not contain any qualification or observations.
The Company has not accepted deposits either from members or public falling within theambit of Chapter V of the Companies Act 2013 and The Companies (Acceptance of Deposits)Rules 2014 during the year. There were no outstanding deposits during and end of thefinancial year 2021 - 2022.
Significant & Material orders passed by the regulators
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the company and its future operations.
Internal Control Systems and their Adequacy
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Internal Audit function is carried out by independentfirm of Chartered Accountants. The scope and authority of the Internal Audit is defined bythe Audit Committee. The Internal Audit Reports are placed before the Audit Committee forits review and the Internal Auditor attend the Audit Committee meetings.
The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures of the Company based on the report of internal auditor the Company undertakescorrective action in their respective areas and thereby strengthens the controls.
Pursuant to the requirement of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has laid down the procedures to inform Board Members aboutthe risk assessment and minimization procedures. Accordingly the Company annually submitsthe Risk Management Report to the Board for their review and suggestions.
Corporate Social Responsibility Policy
Pursuant to the provisions of Section 135 and schedule VII of the Companies Act 2013Corporate Social Responsibility Committee (CSR) was formed to recommend
(a) the policy on Corporate Social Responsibility (CSR) and (b) implementation of theCSR Projects or Programs to be undertaken by the Company as per CSR Policy forconsideration and approval by the Board of Directors. The policy on Corporate SocialResponsibility as approved by the Board is posted on the Company's websitewww.kotharipetrochemicals.com
As part of its initiatives under "Corporate Social Responsibility" (CSR) thecompany has contributed funds for the promotion of health care creating healthinfrastructure including COVID care establishment of medical oxygen generation andstorage plants etc. The contributions in this regard have been made to the RegisteredTrust which is undertaking these schemes. Detailed report on CSR activities in theprescribed format is forming part of this Annual Report.
Annual Performance Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out the AnnualPerformance Evaluation of the Board its Committees and of the individual Directors in theformat (questionnaire) prescribed by the Nomination and Remuneration Committee of theCompany.
The structured questionnaire covers various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance etc.
The performance evaluation of the Directors (without participation of the relevantDirector) was carried out by the entire Board. The Directors expressed their satisfactionwith the evaluation process.
Separate Meeting of Independent Directors
The Independent Directors of the Company had met during the year on 10th March 2022 toreview the performance of Non-Independent Directors and the Board as a whole reviewed theperformance of the Chairperson of the Company and also assessed the quality quantity andtimeliness of flow of information between the company management and the Board without thepresence of the Non-Independent Directors and members of the Management.
Disclosure about Cost Audit
|Filing of Cost Audit Report ||2021 - 2022 ||2020 - 2021 |
|Due Date ||27.09.2022 ||27.09.2021 |
|Actual Date ||30.08.2022(tentatively) ||20.08.2021 |
|Cost Auditor Details ||M/s. P. RajuIyer M. Pandurangan & Associates M.No.27969 Chennai. ||M/s. P RajuIyer M. Pandurangan & Associates M.No.27969 Chennai. |
|Audit Qualification in Report ||- ||Nil |
Listing with Stock Exchanges
The Company is listed in The National Stock Exchange of India Limited (NSE) and theStock Code is KOTHARIPET and ISIN: INE720A01015. The Company confirms that it has paid theAnnual Listing Fees for the year 2022- 2023 to NSE where the Company's shares are listed.
Corporate Governance and Shareholders Information
Your Company has taken adequate steps to adhere to all the stipulations laid down inSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A report onCorporate Governance forms part of this Annual Report. Certificate from the PractisingCompany Secretary confirming the compliance with the conditions of Corporate Governance asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015is attached to this report.
Management Discussion and Analysis Report
A detailed discussion on the industry structure as well as on the financial andoperational performance is contained in the 'Management Discussion and Analysis Report'that forms an integral part of this Report.
Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5 of the Company (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided elsewhere in the AnnualReport.
Particulars pursuant to Section 197(12) and the relevant Rules
(a) The ratio of the remuneration of each director to the median employee'sremuneration for the financial year and such other details: Except Mr.Arjun B.KothariManaging Director and Mr. M.Rajavel Whole Time Director of the Company no director wasin receipt of remuneration except sitting fees.
|Sl. No. Name ||Designation ||Ratio |
|(i) Mr. Arjun. B. Kothari ||Managing Director ||8.64 : 1 |
|(ii) Mr. M. Rajavel ||Whole Time Director ||10.30 : 1 |
(b) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:
|Sl. No. Name ||Designation ||Percentage of Increase |
|(i) Mr. Arjun. B.Kothari ||Managing Director ||No increase |
|(ii) Mr.M.Rajavel ||Whole Time Director ||12% |
|(iii) Mr. S. Sivamahesh ||Chief Financial Officer ||10% |
|(iv) Mrs. K.Priya (*) ||Company Secretary ||- |
(*)Mrs. K. Priya was appointed as Company secretary and Compliance Officer of theCompany with effect from 11th April 2021
(c) 9.80 % increase was reported in the median remuneration of employees in thefinancial year 2021- 2022.
(d) The number of permanent employees on the rolls of company as on 31st Mar 2022: 149.
(e) Increase of remuneration for employees varies between 4% to 21% and for KMP theincrease was in the varying range of 10% to 12% for the year.
(f) We affirm that the remuneration paid during the period under review is as per theRemuneration Policy of the company.
Compliance with Secretarial Standards
The Company complies with all applicable secretarial standards issued by the Instituteof Company Secretaries of India.
Statements in this Report particularly those which relate to Management Discussion andAnalysis as describing the Company's objectives projections estimates and expectationsmay constitute 'forward looking statements' within the meaning of applicable laws andregulations. Actual results might differ from those either expressed or implied in thestatement depending on the circumstances.
Your Directors thank the Banks Customers Financial Institutions GovernmentAuthorities Suppliers and Shareholders for their continued support. Your Directors alsoplace on record their appreciation for the services by the employees of the Company.
|On behalf of the Board |
|for Kothari Petrochemicals Limited |
|Place : Chennai ||Nina B. Kothari |
|Date : May 25 2022 ||Chairperson |